‘All parties within the automotive industry are well aware of the necessity of a transformation. The big question is, how?’ While this statement from Deloitte will not fall on deaf ears, the sentiment continues to ring true. Even before the pandemic triggered supply chain disruption and reduced consumer demand, the automotive sector was set simultaneous tasks of reducing carbon emissions while also developing the next generation of connected cars, electric vehicles, and autonomous technology.
These challenges fall under the umbrella of complex change. This is change that requires the transformation of an existing conceptual framework including values, beliefs, and behaviours. As transformative objectives have become more complex, we have entered an era – the Project Economy – in which projects are now primary vehicles to deliver complex change in collaborative, problem solving ways.
One key lesson from the past two years of turbulence is that volatility, uncertainty, complexity, and ambiguity – otherwise known as VUCA – are now permanent conditions of our working environment. Consequently, agility has never been more important. Businesses must have the capability to pivot how they operate at short notice, be that moving employees to online-only, deploying new technologies to support supply chain disruptions, or navigating staff shortages due to illness.
In the automotive sector, businesses must also contend with the long-term evolution of the market. Manufacturers require long-term strategies to successfully adopt new technologies such as electrification and autonomy, while retailers continue to face the challenge of transitioning from in-person dealerships to online. Both the long- and short-term swings in the industry can be anticipated and readied for, but it requires organisations to undergo systemic change and integrate updated tools, processes and mindsets into their bedrock.
For many this level of change can be daunting but, according to data, it delivers results. Our Pulse of the Profession 2021 study found that agility is more than a buzzword; agile businesses possessed higher levels of organisational agility, more standardised risk management practices, higher productivity and less project scope creep than their traditional counterparts. All contributing to better project performance. The survey also revealed that agile organisations recognise the importance of enabling project skills through a values-based culture that focused on customer value, digital solutions, and diversity, equality, and inclusion.
Throughout the automotive industry, we are frequently witnessing the conception of innovative partnerships that are born to cultivate agility and enable success in this new era. For example, Honda – in a bid to address Tesla’s domination of the electric vehicle (EV) market – has this month joined forces with Sony to explore the development of a dedicated EV Joint Venture that will combine automotive heritage with world-class mobility service technology.
Not only does the partnership provide each organisation with access to new tools and production capabilities, it unlocks new expertise and perspectives that can evolve their respective mindsets for the future.
Focus on project skills
While organisations are collaborating to share hard skill expertise, there is still an escalating problem when it comes to project skills. Experienced project management talent is retiring at an exceptional rate – 13 million professionals are set to retire before 2030 globally – and businesses are up against the clock to plug the gap: in Europe alone, talent shortages threaten to put £61.1 billion GDP at risk before 2030 according to our Talent Gap Report 2021. In short, the world needs 25 million new project management employees before 2030; we need to act fast.
The need for project talent is not sector-exclusive, shrinking the pool for the automotive industry to hire from. We propose that leaders instead focus on upskilling and cross-skilling team members already in their organisation to develop “changemakers” – project manages equipped with the skillset to turn ideas into reality – tailored for the challenges of an automotive environment. It is important for organisations to act like universities for their people, as well as a workplace.
This may require some organisational transformation to cultivate an environment that encourages learning and development, but the short-term investment and effort can provide invaluable long-term gain. Focus should be placed on active learning, with measurable baselines and targeted competence levels. We will hear more about Enterprise Capability strategies that draw both from corporate strategies and the unfolding socio-political imperatives such as the build-up of systemic trust, and practical ethics.
Achieving a greener tomorrow
A further trend we are seeing across the automotive sector is the prioritising of Environmental, Social, and Governance (ESG) roles in hiring. Automotive manufacturing and supply companies in Europe saw the largest growth in ESG roles in Q3 2021, according to GlobalData, with a 3.8 percentage point increase from Q2.
This is hardly surprising when road vehicles are currently responsible for 91% of the UK’s annual domestic transport CO2 emissions and 14.5% total EU emissions. With legally binding reporting requirements coming in to affect, there is a great need for people who understand ESG impacts and who follow ESG-compliant ways of working.
The bottom line is that net zero ambitions cannot be achieved without net zero skills. We are increasingly seeing businesses embedding climate goals into organisational strategy by adapting their corporate structure and hiring chief sustainability officers – or equivalents – to their leadership teams. It is critical to give ESG a seat at the table when it comes to decision-making on strategy, budget, and talent so that sustainability is embedded into the fabric of an organisation.
Ultimately, progress can only be achieved with everyone pulling in the same direction. This – as outlined in our Global Megatrends 2022 report – means avoiding a ‘frozen middle’ and ensuring that project managers at all levels integrate emissions targets into key performance indicators, build emissions management into ways of working and engage with all stakeholders about sustainability practices.
While this guidance doesn’t provide a quick fix to what is one of the most complex challenges of our generation, it represents positive, transformative first steps towards future-proofing your organisation and the automotive sector for years to come.